Bruce and Lois Zenkel, et al. - Page 45

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          respect to the Partnership transactions, the records indicate               
          that Becker overlooked several red flags regarding the economic             
          viability and market for the Sentinel EPE recyclers.  The                   
          offering memoranda for the Partnership transactions warned that             
          there was no established market for the Sentinel EPE recyclers.             
          Becker never saw any marketing plans for selling the pellets or             
          leasing the recyclers.  He accepted representations by PI                   
          personnel that they would be marketing the recyclers to clients             
          and that there was a sufficient base of end-users for the                   
          machines, yet he never saw PI's client list.  At the time of the            
          closing of the Partnerships, Becker did not know who the end-               
          users were or whether there were any end-users actually committed           
          to the transaction.                                                         
               Becker purportedly checked the price of the pellets by                 
          reading trade journals of the plastics industry.  However, he did           
          not use those same journals to investigate the recyclers'                   
          purported value or to see whether there were any advertisements             
          for comparable machines.  The record in these cases does not                
          indicate that any of petitioners or their advisers other than               
          Becker asked to see those journals for their own examination.  In           
          concluding that the Partnerships would be economically                      
          profitable, Becker made two assumptions that he concedes were               
          unsupported by any hard data:  (1) That there was a market for              
          the pellets; and (2) that market demand for them would increase.            






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